What Can Los Angeles Expect for the Rights to Its Meters?

Donald Shoup doesn’t think the city is going to get a lot for its parking. Find out why after the jump.

For the politicians looking to close a loophole in the
city’s budget through privatizing street parking, the biggest question is going
to be “how much money can the city get” for leasing enforcement and collection
of paid street parking.

Reporting from this week’s City Council hearing, Joe Linton
writes, “The city is facing a $35M deficit in the current fiscal year.
The deficit projected for next fiscal year was projected at $433M (out of a $7B
budget), but that forecast is being revised to about $530M.” If Chicago got
$1.16 billion for leasing control of its 36,000 meters, Los Angeles should be able to get at least
that much for it’s 43,000 metered spaces, right?

Not necessarily.
First, given the backlash that the city experienced for just raising the
hourly rate for many meters, can we really expect the Council to either let the
investor decide the new rates or agree to a series of rate increases that would
place L.A.’s parking rates at the top of the country’s?

Even if the City Council does move forward with a plan that
would drastically raise the cost of street parking, UCLA Traffic Professor
Donald Shoup raises another question about how much money the city can really
expect to get in a privatization deal because of a state law that requires. In an e-mail, the parking guru writes:

I suspect that LA will
have a hard time finding bidders for a parking meter
concession because so many drivers with disabled placards now park free at
meters. Section 22511.5 of the California
Vehicle Code states, “A disabled person or disabled veteran is allowed to park
in any metered parking space without being required to
pay parking meter fees.” If disabled placard (DP) holders
can park free for an unlimited time at meters, I suspect that few investors
will want to bid for the meter revenues. In a casual walking-around
survey in downtown, it looked like about half of all the metered spaces were
occupied by cars with disabled placards.

If a concessionaire tries to increase the meter rates, the results will
probably be disappointing. Increasing the meter rates will increase the
incentive to abuse placards and will also reduce the willingness of those
without placards to pay for parking at the curb. The
result may be that DP parkers (many of them fraudulent) will use all the curb
spaces, and almost no one will pay for parking. The
increased incentive to abuse placards may even reduce curb parking
availability for genuinely disabled drivers. Bad placards will drive out
genuine placards.

It will be interesting to see how much
investors will bid for a Los Angelesparking meter concession. The first thing investors
ought to ask is what is the current parking meter revenue
as a percentage of potential revenue if the all the metered spaces were
occupied and the drivers paid the meters. I suspect that the ratio of
current revenue/potential revenue is probably quite low.

Just to place this discussion into perspective, assuming the
city doesn’t reduce the FY 2011 deficit of $530 million, if the we very well
could be looking at not even getting three years of a balanced budget off of a
sale, and in fact could very well not even make it until July of 2011.

Selling off the parking meter rights is not about raising revenue.
Its about further disenfranchising the taxpayer.

Once the meters are sold off, and the one-time money is spent in under a year, the gang of 15 will be able to shrug, and say “there is no more money. we’ll have to come up with new sources of revenues.” Watch then for a new pedestrian tax, bike tax, dog tax, fast-food tax, whole-food tax, drinking tax, water tax, flushing tax, laundry tax, and my personal favorite, the transient instant-messaging, texting and sexting taxes. (Oh, you didn’t read Prop S before you voted for it, did you?)

ALSO ON STREETSBLOG

Like a once-vanquished zombie rising from its grave in a poorly conceived sequel, the city is reportedly considering a series of plans that would hand over control and profit for nine city-owned parking garages to a private entity. Last January, the City Council rejected a proposal by Mayor Antonio Villaraigosa to begin soliciting bids for […]

Photo: j-spin/flickr Hat tip to reader Ryan Lehman Privatizing public parking has been referred to in some circles as “the outsourcing of political will” to raise parking fees. In short, because politicians don’t have the spine to raise parking fees, they sell or lease their parking meters and garages to the highest bidder. The city […]

With the Mayor’s proposal to lease out the maintenance, revenue collection, and profits of the city garages killed by the City Council earlier this year, the city has begun to move forward with other plans to maximize the revenue and efficiency of the city’s publicly owned parking spaces and lots. On Monday, the City Council […]

Picture via John and Keturah/Flickr Privatizing street parking. There are few transportation-related measures that will generate more controversy, more heated discussion and more strange bedfellows than a proposal that combines flashpoint issues from across the spectrum: Smart growth, privatization, parking, urban planning and budget issues all wrapped up in one neat package. And now, Los […]

Later today, behind closed doors, the Los Angeles City Council will meet to debate and discuss whether to put out to bid a plan to lease all of the city controlled parking lots throughout the city for fifty years. The debate over whether the city should proceed has been almost completely centered around whether or […]

When Chicago Mayor Richard Daley announced that he was striking a deal to privatize his city’s 36,000 parking meters, it was a golden opportunity for transportation reform. If all went well, the deal could have cleared a political path for higher peak-hour meter rates, curbing double-parking and congestion-causing cruising. But Chicago managed to completely bungle […]